12 Things to Do Before the Ball Drops Again



12. Leverage Your Health Plan Deductible

Have you hit your health plan deductible for the year? Then now might be a better time to consider getting to the doctor to check out that mole, rather than waiting for the new year.


11. Don’t Forget Your IRA

Your traditional IRA contributions may be tax-deductible. However, the deduction may be limited if you or your spouse is covered by a retirement plan at work and your income exceeds certain levels. Withdrawals from traditional IRAs are taxed as ordinary income and, if taken before age 59 ½, may be subject to a 10% federal income tax penalty. Generally, once you reach age 70 ½, you must begin taking required minimum distributions.


10. Use Up Your Flexible Spending Account

FSAs allow you to put pre-tax money away for medical expenses, but you may only allowed to carry over up to $500 to the new year. Spending these before the year’s end allows you to take full advantage of the account.


9. Contribute to Charity

Giving to charity around the holidays is always a good idea, both for your spirit and you tax bill, but pay attention to the date of delivery. In order for the giving to count toward the current year’s taxes, the charity has to receive the gift by year’s end.


8. Defer Taking Yearend Bonuses or Salary

If your employer has the flexibility, or you’re a freelancer, you might consider deferring income or a bonus to next year. This really only makes sense if you anticipate being in a lower tax bracket next year. (No use pushing next year’s income into a higher tax bracket.) This could help manage your tax burden for the current tax year.


7. Harvest Capital Losses

This simply means selling investments at loss that may no longer fit your portfolio, which may offset capital gains in other areas. Be careful, though. You can’t buy those stocks back for 30 days and still take the loss.


6. Take Advantage of Your Annual Gift Tax Exclusion

You can gift up to $14,000 a year per person. You get a new gift exclusion every year, so consider your choices.


5. If You Are of Age, Take Required Minimum Distributions

At age 70 1/2, you’re required to start taking withdrawals from certain tax deferred retirement accounts, so don’t miss it.


4. Put Off Joining the Gym

It’s a good time of year to start planning for your New Year’s resolution, and getting fit is always a great goal. Wait until January, though, for the actual signup. Gym prices may be better.


3. Plan Your Itemized Deduction

Some expenses can only be deducted on your taxes if they meet a certain percentage of your adjusted gross income (AGI). You can meet these AGI floors by bunching these expenses together. For example, medical expenses may be required to meet a 10 percent AGI floor to be deducted. If you had not hit that floor, you might consider moving that costly procedure you have planned for next year, forward into this year. The information in this material is not intended as tax advice. Please consult tax professionals for specific information regarding your individual situation.


2. Get Organized for Tax Season

Gather all the documents, records, receipts, and anything else you might need come tax time.


1. Get a Checkup

Schedule a meeting with your financial professional to review your overall investments and the health of your portfolio, and to discuss your strategy for the following year.